Schaeffer's Trading Floor Blog

News Views

by 3/2/2005 8:07 AM
Stocks quoted in this article:

The macro headlines are somewhat quiet as some appear to be waiting for this morning's testimony from Alan Greenspan...At the company level there are a few stories floating around...On the retail front, Costco Wholesale (COST) reported disappointing earnings...On the semiconductor front, Novellus Systems (NVLS) is getting some attention after their mid-quarter update last night.

The comments NVLS made have some questioning whether margins are getting squeezed and the stock is indicated to open by about a point lower. However, I am seeing some optimistic chatter that is downplaying the concerns. This is interesting given the resistance we have been watching on the SMH - and the recent sector upgrades..

Its also worth noting the weakness in S&P futures that I just mentioned below. Yesterday we saw how the SPX pushed up into resistance so I suspect that many are watching the action here. Given how the recent frenetic activity could best be described as "follow the drunken leader", it should be interesting to watch what happens here...

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Good Morning

by 3/2/2005 7:59 AM
Stocks quoted in this article:

We start the day with futures indicating a small pullback at the open. With an hour and a half until the open, S&P futures are trading roughly four points below fair value. Gold is down three points to 430 while oil is down nine cents to 51.59.

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Final Figures

by 3/1/2005 4:38 PM
Stocks quoted in this article:

To go along with the chart in the post below...

Index Index Value Point Change Percent Change
S&P 500 (SPX) 1210.4 6.8 points 0.57 percent
Dow Jones Industrial Average (DJIA) 10830.0 64 points 0.6 percent
Nasdaq Composite (COMP) 2071.3 19.6 points 0.96 percent
Russell 2000 (RUT) 638.5 4.5 points 0.71 percent
CBOE Market Volatility Index (VXO) 11.78 -0.08 points -0.7 percent

...we have the final figures for today. As you can see, the COMP showed a slight bit of outperformance and a check of the daily chart shows the COMP did surpass last week's closing high. Of course, the COMP and NDX have lagged the action so there is some catching up to do. Looking at the big picture...

...we see a picture that was similar to what we saw all day...most stock groups were strong while commodities were weak. The semis were the top performing group but the SMH is still sitting below resistance. Perhaps there is another upgrade looming (to match what we saw yesterday and today) to give the group the final boost.

In terms of today's action, I already gave my thoughts. If you missed it make sure you read the post below - "Into the Close" and "Chart Chatter - Pondering the SPX Daily".

With the SPX poised just below resistance, tomorrow morning has the potential to be very interesting...

On a final note, one of the stocks I am keeping a curious eye on is (the stock) Martha Stewart Living Omnimedia Inc (MSO) as (the woman) Martha Stewart is due to be released from prison. Last week I noted the stock was bouncing off support and the scorecard is still constructive with a reading of 7, but I am starting to get edgy due to all the press the stock is getting. The stock was down today as MSO's publisher and executive vice president resigned. The shares are still holding above support so I wouldn't call the uptrend over - I just think it will be worthwhile to keep a close eye on how it behaves...

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Closing Snapshot

by 3/1/2005 4:12 PM
Stocks quoted in this article:

Nothing too exciting here...but since we tracked the intraday action all day, I thought some might be curious about the close...


Chart Courtesy of Thomson/ILX

The bulls failed to push through last week's high but left the SPX within a chip shot of that for tomorrow...

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Into the Close

by 3/1/2005 3:37 PM
Stocks quoted in this article:

We enter the final half hour of the session with the SPX pushing in on its high for the day...


Chart Courtesy of Thomson/ILX

I have already laid out my thoughts on the action here. While I see some concerns bubbling under the surface, I think we will see hedge funds chase the action should we break out.

As I watched the bull bear-bear debate with Todd, one point stuck out to me for the bullish case...It was a caveat I have seen the bulls argue many times - and usually starts with a phrase like "barring an unforeseen event"...

While that may seem like a small point, I think it is worth pondering how potent (insidious?) that "get out of jail free" card can be.

In a book called Fooled by Randomness by Nassim Nicholas Taleb, the theory of unexpected events is put in a very interesting light. If you aren't familiar with this book, you can see a quick discussion of the topic in this old column of mine - No Amount of Observations...


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